Magnesium market overall in the doldrums, downstream product processing fees under pressure [SMM Magnesium Morning Meeting Minutes]

SMM Magnesium Morning Meeting Minutes on Dec 11:

Magnesium Raw Material

Prices

The ex-factory prices, excluding tax, for 1-3 cm dolomite (Wutai) stood at 108 yuan/mt, flat from the previous working day; for 2-4 cm dolomite (Wutai) at 128 yuan/mt, also flat. In Shaanxi, the mainstream ex-factory price for 75% ferrosilicon was 5,600-5,650 yuan/mt.

Supply-Demand

Recently, dolomite prices in Wutai held steady, with stable production at magnesium plants in the main production area. The persistent release of rigid demand for dolomite provided strong support, and dolomite prices were expected to hold up well. In the previous working day, the most-traded ferrosilicon futures contract 2603 closed at 5,434, up 12. In the spot market, affected by the traditional off-season, rigid demand support for ferrosilicon was insufficient. Considering significant cost support, ferrosilicon prices were expected to maintain bottom consolidation.

Magnesium Ingot

Prices

Today, mainstream quotations for magnesium ingot in Fugu were 15,550-15,650 yuan/mt, down 50 yuan from the previous working day; China's FOB price was $2,210-2,270/mt.

Supply-Demand

Yesterday, magnesium prices continued to decline, accelerating downward to the recent low range. Market trading sentiment was sluggish, with domestic and foreign trade orders mainly driven by rigid demand procurement. Overseas orders for the week were largely released, but overall trading volume remained insufficient. However, as magnesium prices fell rapidly approaching the production cost line, SMM survey indicated that magnesium plants on the supply side showed stronger willingness to hold prices firm. The 15,500 yuan/mt level might form a recent low period, with upstream reluctance to sell significantly increasing. Magnesium prices were expected to gradually stabilize.

Magnesium Alloy

Prices

Today, the mainstream tax-included ex-factory price for magnesium alloy in China was 17,550-17,750 yuan/mt; China's FOB price for magnesium alloy was $2,470-2,520/mt.

Supply-Demand

Recently, magnesium alloy prices were under pressure, following the decline in raw material magnesium ingot prices, while magnesium alloy processing fees held up well. Supply-demand side, the magnesium alloy market continued to experience undersupply, with leading magnesium alloy producers scheduled until early January, and spot supply was tight. However, according to SMM, entire industry chain plants in the main primary magnesium production area actively increased alloy production, with daily magnesium alloy output in Shaanxi increasing significantly, which would supplement part of the supply gap. Affected by this, upward momentum for magnesium alloy processing fees might be insufficient.

Magnesium Powder

Prices

Today, the mainstream tax-included ex-factory price for 20-80 mesh magnesium powder in China was 16,750-16,950 yuan/mt; China's FOB price was $2,380-2,420/mt.

Supply-Demand

The current magnesium powder market is primarily driven by rigid demand, with producers generally adopting a cautious strategy of producing based on sales. Since the beginning of December, order production schedules have shown a phased recovery, mainly driven by concentrated stockpiling ahead of the overseas Christmas holiday. However, overall market demand remains sluggish, and with raw material prices having gradually hit bottom and stabilized, magnesium powder prices have also entered a stable range.